The Solidaritätszuschlag, or “solidarity surcharge” in English, is a tax levied in Germany on top of the income and corporate taxes. It was introduced to cover the costs associated with the reunification of East and West Germany.
What is “Solidaritätszuschlag”?
The Solidaritätszuschlag is a supplementary charge to income tax and corporation tax, initially established to finance the expenses of German unification. This surcharge is currently set at 5.5 percent. It applies to all taxpayers in Germany, although recent reforms have significantly reduced the number of individuals and entities required to pay it, aiming to alleviate the financial burden on lower and middle-income earners[1][2][3].
More information about “Solidaritätszuschlag”
Introduced in 1991, the Solidaritätszuschlag was a response to the financial demands of integrating the former East Germany into the Federal Republic of Germany. Over the years, the surcharge has undergone several reforms. Notably, since 2021, around 90% of taxpayers have been exempted from paying the surcharge due to raised income thresholds. This change was part of a broader effort to adjust the tax system to current economic conditions and reduce the tax load on the majority of the population[2][3][5].
Related to “Solidaritätszuschlag”
Here are some additional terms that are related to Solidaritätszuschlag:
- EinkommensteuerEinkommensteuer, literally translated as "income tax," is a tax levied on the income of individuals in Germany. It is a...: The income tax to which the Solidaritätszuschlag is applied as a surcharge. It is a direct tax on the income of individuals.
- Körperschaftsteuer: Corporation tax, another base tax to which the Solidaritätszuschlag applies. It is levied on the profits of companies.
- Wiedervereinigung: Refers to the reunification of East and West Germany, the primary reason for the introduction of the Solidaritätszuschlag.
The Solidaritätszuschlag serves as a historical reminder of the costs associated with reunifying Germany and the ongoing efforts to balance economic disparities between the former East and West Germany.